$1.6 billion Perth convention centre upgrade scrapped to buy and build hospitals

The WA government will divert funding from the abandoned Perth Convention and Exhibition Centre upgrade to expand the state’s under-pressure hospital system at a cost of $1.5 billion which will include the purchase of St John of God’s Mount Lawley Hospital.

Premier Roger Cook made the funding announcement on Thursday, confirming the state would no longer proceed with plans to upgrade the ageing ‘shed on the Swan’ convention centre over concerns its cost would blow out.

Under the new fund, Cook said negotiations were underway to buy the Mount Lawley Hospital from private operator St John of God, which would immediately add 197 beds into the public system.

More than half the beds at that hospital are already filled with public patients.

The state will also abandon long-promised expansion plans of the Peel Health Campus south of Perth in favour of building an entirely new hospital and will pay for a new six-storey block at Royal Perth Hospital.

Cook said while it was disappointing to leave the PCEC as it is, it was the right thing to do.

“This record investment also means that we have to make some difficult decisions,” he said.

The WA government has been heavily criticised by health groups like the Australian Medical Association of WA and the opposition for the state of its hospital system, which experienced record ambulance ramping levels in September.

The $1.5 billion figure includes $500 million already announced by the government for hospital upgrades, such as the Geraldton oncology unit.

Labor promised a $104 million upgrade of the Royal Perth Hospital ED at the 2025 election and a $152 million expansion of the Peel Health Campus at the 2021 election.

The Peel Health Campus expansion had blown out to about $558 million, according to leaked project updates and the new funding announced Thursday represents wholesale changes to both projects.

Cook said the new Peel Hospital and Royal Perth Hospital plans were the result of an Office of Major Infrastructure Delivery analysis after it took over delivery of the projects from WA Health earlier this year.

The new RPH ED will be built on a new site, with the government saying this would result in no disruption to the current ED, better ambulance access and allow more emergency beds and mental health services. About $33 million has been committed to planning the project, with construction expected to start next year.

The new six-storey Peel Health Campus will include a 39-bay ED, an operating theatre complex, a high dependency unit and more inpatient beds. It will also include new mental health, cancer and palliative care facilities. About $37 million has been allocated to plan for the new hospital.

Health Infrastructure Minister John Carey said the old hospital could be used for aged care beds.

St John of God Health Care Group chief executive Bryan Pyne said, pending negotiations, the hospital would transfer to public hands by 2026.

The announcement was welcomed by Unions WA and the Australian Medical Association WA.

Opposition leader Basil Zempilas said the money was long overdue and a symptom of poor health planning by the WA government.

He said now the WA government had diverted funds from the PCEC to health there was no justification for it to continue to pursue the $217 million Burswood Racetrack or spend $100 million on the Perth Bears.

“There’s $317.5 million allocated to the rugby team and the racetrack that could have gone to the PCEC redevelopment, and it’s for others to decide what would ultimately bring in the most net gain for the city of Perth,” he said.

Cook announced the redevelopment of the PCEC in January 2024, stating that bringing the building to the river would “right a historic wrong” and that “our city deserves better than a shed on the river”.

The state government had already spent $35.5 million on the redevelopment project.

The works, which were meant to get underway in October, were predicted to cost $1.6 billion according to media reports – although leaseholders Wyllie and Brookfield had declined to put a firm price tag on the project.

Cook confirmed this price and said $500 million would be needed to fix the impacts on road and rail infrastructure if the redevelopment had gone ahead.

“We want to expand our major conference capacity, but it needs to occur in a way that delivers value for taxpayers and doesn’t interrupt the impressive forward program of business events activity,” Cook said.

“I thank the leaseholders for their commitment to the existing facility and to the future events capacity of Western Australia and look forward to working with them to find a new way forward, in the future.”

The PCEC funding had not been included in any budget papers.

When asked where the money for the hospital program came from Treasurer Rita Saffioti said it would come from operating surpluses.

“We believe that if you’ve got limited building activity, you’ve got to direct it to health, and that’s what we’re doing,” she said.

Tourism Council boss Evan Hall said he was deeply disappointed the government had abandoned upgrade plans and said it would cost the state $180 million in lost economic returns annually, which could pay for upgraded hospitals.

“The project would generate $10.8 billion over its working life, including billions in additional taxation revenue for State Government investment in public services. WA cannot afford to miss out on this return,” he said.

“The previous government invested over a billion dollars in Perth Stadium, and that investment has delivered massive returns through major events, job creation and tax revenue that funds essential services. A PCEC expansion offers the same kind of proven return on investment that will fund hospitals and health services.”

Get alerts on breaking news as it happens. Sign up for our Breaking News Alert.